GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 6 to 8 cents lower.
Wheat: SRW 10 to 12 cents lower; HRW 10 to 12 cents lower; HRS 6 to 8 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each saw selling pressure though stayed above recent lows. Buying interest increased into the break, bulls are seeking to build on late overnight strength despite a continued risk-off attitude in the general marketplace. Front-month crude oil futures made a more than six-month low overnight while the U.S. dollar index is trading over 900 points lower.
An unwinding of global carry trades is turning into a rout that’s jolting markets around the world to open the week. The yen and yuan pushed higher Monday, while the U.S. dollar fell. The moves came as a selloff in risk assets intensified with global stock markets pummeled by concerns about the U.S. economy as the Federal Reserve is now seen as behind the curve on cutting interest rates. The VIX, Wall Street’s fear gauge, hit 37 early today. If it holds, that will be the VIX’s highest closing level since October 2020.
Numerous rain chances and cooler temps will be seen across the northern and eastern Corn Belt over the next 10 days. Southern areas of the Corn Belt, the southwestern Plains and Delta will see net drying, though cooler temps later this week may limit crop stress. Hurricane Debby made landfall this morning and will bring heavy rains to portions of the Southeast early this week.
A record heatwave in July across most of Ukraine may reduce corn production by about 6 MMT from last year’s level, producer group Ukrainian Agrarian Council (UAC) warned. UAC gave no official production estimate but the warning of potential production loss would be about in line with last week’s forecast from the Ukrainian grain traders union UGA, which expected production of 23.4 MMT compared with 29.6 MMT in 2023. Denys Marchuk, deputy head of the UAC, said the corn yield in many regions may fall by about 30% due to the unfavorable weather.
CORN: December corn futures negated Friday’s gain overnight. Initial resistance stems from the psychological $4.00 mark and is backed by the 10-day moving average at $4.05 1/4. Bulls are seeking to hold prices above the contract low of $3.95, which is reinforced by $3.91.
SOYBEANS: November soybean futures saw selling pressure overnight. Bulls are aiming to retake resistance at $10.25 which is bolstered by the 10-day moving average at $10.34 3/4. Strong support stands at $10.16 1/2, which is quickly backed by last week’s for-the-move low at $10.13.
WHEAT: December SRW futures negated last week’s gain overnight. Resistance comes in at $5.57 1/2 with further buying seeking to overcome last week’s high of $5.64 1/2. Bulls are seeking to hold support at $5.45 though strong support persists at $5.39 1/2.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open with a weaker tone given the instability of global financial markets overnight. Cattle futures faced sustained selling pressure alongside the U.S. equity markets late last week, which continued overnight. Steep discounts to the cash market persist, which could limit selling pressure after the open, though traders are in liquidation mode, which is likely to drive price action in the near term. Wholesale beef ended Friday mixed, with Choice rising 98 cents to $313.77 and Select slipping 29 cents to $297.17.
HOGS: Lean hog futures are expected to open lower on liquidation selling pressure. Lean hog futures sunk Friday despite ongoing strength in the CME lean hog index, which is up another 11 cents to $93.64. The slowdown of gains in the index paired with heavy volatility in outside markets is likely to weigh heavily on futures. August lean hog futures, which expire Aug. 14 and are settled against the index two days later, finished Friday at a $1.44 discount to today’s quote. Pork cutout fell $1.55 Friday to $104.31 as all cuts posted losses on the day.